P2P lending service Renrendai handed $130 million to get a head start in China’s budding microfinance sector

Chinese online peer-to-peer lending service Renrendai announced its parent company, Renrenyou, received $130 million in Series A funding, according to Sina Tech. Trustbridge Partners and an undisclosed investor led the round with $65 million each.

Renrendai reported it facilitated RMB 1 billion ($165.2 million) in loans as of August 2013, with a 276 percent year-on-year increase in the first half of last year.

This is the company’s first funding round since it raised an angel round from Honghe Venture Capital when it launched in 2010.

Just last week, one of Renrendai’s rivals, Dianrong, also received an undisclosed amount in series A funding. The fast-growing but high risk P2P lending sector will be a cut-throat competition this year. The Chinese government is expected to release new laws on P2P lending in the coming months. Investors are injecting funding early in the year to prevent their companies from being drowned out.

Some of the biggest customers for lenders like Renrendai are startups and other small- to medium-sized businesses. These cash-strapped companies often find it difficult to get loans from large state-run Chinese banks, which are more inclined to lend to other state-owned enterprises.